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Growth Opportunities and Accounting Conservatism

19 H2: How Managerial Ownership has positive effect on Accounting Conservatism

3. Growth Opportunities and Accounting Conservatism

At companies that use the principle of conservatism are reserves Hidden is used for investment, so a conservative company synonymous with growth companies Barry and Wilopo, 2002. This growth will be responded positively by investors that the market value of the companys conservative greater than its book value that will create goodwill. The market will be positive rate on the investment made by the company because of the investments made now expected that the company will gain future cash flows. Markets positive rate on the investment made by the company, because of the investment is expected the company will gain a cash flow. Research Feltham and Ohlson 1995 and Penman 2001 suggest that conservative accounting is a concept that is appropriate for that concept shows the growth of a companys net assets reported as lower than market value. Based on these descriptions formulated the following hypotheses : H3: How Growth Opportunities has positive effect on Accounting Conservatism 4. Sales Growth and Accounting Conservatism The sales growth will affect the size of conservatism through the accrual and market value Ahmed and Duellmann 2007 .High sales growth will increase expectations of future cash flows that can affect the conservatism market. The companys growth in the future is a sign that the company has reached the high level of profit. So that higher sales growth indicates that the company is more conservative. 20 Padmawati and Fachrurrozie 2015 states that the variable sales growth shows the influence with accounting conservatism and has a positive sign on the coefficient. Based on the theory of signal, with the investment, the market will be positive rate on investment by the company because of the investments made today is expected the company will gain future cash flows. Results of research supporting research Feltham and Ohlson 1995 and Penman 2001 in Widya, 2005 which states that the concept of conservative accounting shows the growth of a companys net assets are reported as lower than the market value. Companies that use mostly conservative principles describe a company is grows because there are hidden investment reserves used for investments. Based on these descriptions formulated the following hypotheses : H4: How Sales Growth has positive effect on Accounting Conservatism

5. Independent Commissioner, Managerial Ownership, Growth Opportunities

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